VKS Projects' initial public offer (IPO) closed on 4 July 2012 with a subscription of 1.03 times. The IPO received bids for 1.02 crore shares compared with 1 crore shares on offer, data showed on NSE. The company had fixed an IPO price band of Rs 55 to Rs 60.
The qualified institutional buyers (QIBs) category was subscribed 1.15 times. The retail investors category was subscribed 1.13 times. The non-institutional investors (NII) category was undersubscribed. The NII category received bids for 5.74 lakh shares as against 15 lakh shares offered by the company.
VKS Projects is engaged in the business of undertaking EPC/turnkey item-rate contract for mechanical, piping and heavy equipment erections for various industrial and infrastructure projects. Of late the company is also forayed into land development for industrial/infra projects.
VKS Projects proposes to use the proceeds of the issue to meet long term working capital requirement to the tune of Rs 15 crore, finance procurement of construction equipment/machinery of Rs 22.64 crore, finance setting up of engineering design studio/office and training centres in Chennai, Cochin, Delhi, Hyderabad and Ahmedabad of Rs 10 crore and balance for general corporate purposes and meet issue expenses.
The company's order book as at end of 31 December 2011 stood at Rs 98.25 crore, translating into 1.6 times of its revenue for the year ended March 2011 (FY 2011).
This issue has been graded by CRISIL and has been assigned the IPO Grade 1, indicating that the fundamentals of the issue are poor relative to other listed equity securities in India.